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Govt lifts ban on onion exports subject to MEP of $550 per tonne; imposes 40% export duty

06 May 2024 Evaluate

With an aim to boost income of a large section of farmers, the government has lifted the ban on onion exports subject to a minimum export price (MEP) of $550 per tonne. The government has imposed a MEP of $550 per tonne (around Rs 46 per kg) as well as 40 per cent export duty. Taking duty into account, the shipments will not be allowed below $770 per tonne (around Rs 64 per kg). On December 8 last year, the Centre had banned onion exports in early December to control retail prices amid concerns over likely fall in production. During the last 4-5 years, the country annually exported between 17 lakh and 25 lakh tonnes of onions.

Consumer Affairs Secretary Nidhi Khare said the lifting of the ban would not lead to any price rise in retail markets. Asserting that the government is committed to protect the interests of both consumers and farmers, she said ‘Prices will remain stable. If at all there is any increase, it should be very marginal’. The decision assumes importance as it comes before the crucial Lok Sabha polls in key onion belts like Nashik, Ahmednagar and Solapur in Maharashtra. Farmers of this region have been demanding a lifting of the ban so that they can get a better price for their produce.

Nidhi Khare said the decision has been taken after considering the latest estimates of onion production in rabi season at 191 lakh tonnes, which is comfortable. Availability and prices of onion in global markets were also factored in while taking this decision. She added the monthly domestic demand of onion is around 17 lakh tonnes. She noted that lifting of the ban would also encourage the farmers to put more area under onions. The monsoon forecast is above normal.

In March, the Union Agriculture Ministry released the data for onion production. As per the data, onion production in 2023-24 (First Advance Estimates) is expected to be around 254.73 lakh tonnes compared to around 302.08 lakh tonnes last year. This is due to a decrease of 34.31 lakh tonnes output in Maharashtra, 9.95 lakh tonnes in Karnataka, 3.54 lakh tonnes in Andhra Pradesh and 3.12 lakh tonnes in Rajasthan.

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